Which of the Following Is a Shortcut Used in Judging

question 102

Multiple Choice

Which of the following is a shortcut used in judging others by making generalizations?

• A) hindsight bias
• B) randomness error
• C) stereotyping
• D) illusory superiority
• E) telescoping effect

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Definitions:

Risk-Free Asset

An investment that is considered to have negligible risk of financial loss, typically government bonds of stable countries.

Capital Allocation Line

A line representing the risk-return trade-off of different portfolios, showing the highest expected return for a given level of risk.

Standard Deviation

A measure of the dispersion or variation in a set of values, indicating how much the values differ from the mean of the set.

Complete Portfolio

A portfolio that includes both risky assets and a risk-free asset, optimizing the balance between risk and return.